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ARRIS Announces Preliminary and Unaudited Third Quarter 2009 Results

SUWANEE, Ga., Oct. 26 /PRNewswire-FirstCall/ -- ARRIS Group, Inc. (Nasdaq: ARRS), a global technology leader in the development of advanced cable telephony, next generation high-speed data, demand driven video solutions, operations software and broadband access equipment, today announced preliminary and unaudited financial results for the third quarter 2009.

Revenues in the third quarter 2009 were $275.8 million, compared to second quarter 2009 revenues of $278.5 million and third quarter 2008 revenues of $297.6 million. Through the first nine months of 2009 and 2008, revenues were $807.8 million and $852.2 million, respectively.

Adjusted net income (a non-GAAP measure) for the third quarter 2009 was $0.25 per diluted share, compared to $0.27 per diluted share for the second quarter 2009 and $0.24 per diluted share for the third quarter of 2008. Year to date, adjusted net income was $0.69 per diluted share for 2009 as compared to $0.52 per diluted share in 2008. The increased profitability primarily reflects higher gross margins.

GAAP net income for the third quarter 2009 was $0.17 per diluted share, as compared to the second quarter 2009 of $0.18 per diluted share, and the third quarter 2008 of $0.18 per diluted share. Year to date, GAAP net income was $0.45 per diluted share for 2009 as compared to $0.27 per diluted share for 2008. Significant GAAP items in the third quarter 2009 that have been excluded in computing adjusted net income and earnings per shares include: amortization of intangibles, equity compensation expense, restructuring and acquisition-related costs, and non-cash interest related to convertible debt. A reconciliation of adjusted net income to GAAP net income per share is attached to this release and also can be found on the Company's website (www.arrisi.com).

Gross margin in the third quarter 2009 was 41.9%, which compares to the second quarter 2009 of 42.1% and the third quarter 2008 of 35.7%. The year-over-year improvement primarily reflects continued strong CMTS sales.

The Company ended the third quarter 2009 with $577 million of cash resources, which includes $562 million of cash and short-term investments, and $15 million of long-term marketable security investments, up in the aggregate by approximately $53 million from the end of the second quarter 2009 as a result of both strong earnings and lower working capital. The Company generated $63 million of cash from operating activities in the third quarter 2009 and $171 million through the first nine months of 2009, which compares to $46 million and $87 million in the same periods in 2008. Order backlog at the end of the third quarter 2009 was $170 million and the Company's book to bill ratio in the third quarter was 1.01. These amounts compare to order backlog of $166 million and book to bill ratio of 1.04 in the second quarter of 2009.

"The ARRIS team continues to deliver products and services that our customers worldwide need in order to grow, meet the competition and enhance the subscriber experience," said Bob Stanzione, ARRIS Chairman & CEO. "Rapid increases in internet TV traffic are altering the home video experience and creating demand for the ARRIS high speed data platform. We have taken key steps to grow our current business to include a strong video product suite in order to capitalize on today's vision of a converged voice, data and video platform."

During the quarter the Company announced the purchase of substantially all of the assets of Digeo, Inc., which provides products and a rich patent portfolio for video networking and multi-media services platforms as well the purchase of EGT, Inc. which provides video processing technologies that complement the Company's VOD, ad insertion and switched digital video product offerings. Also during the quarter, the Company announced that two new customers, Bresnan Communications and Kabel Nord, had selected the market leading ARRIS C-4 CMTS product for deployment in their operation areas. International sales represent a growing portion of ARRIS revenues with Cablevision Mexico the third largest customer in the quarter and three Japanese and Canadian customers ranked in the top twenty customers.

"Our third quarter 2009 results reflect continuing strong market acceptance of ARRIS products," said David Potts, ARRIS EVP & CFO. "Once again, our strong gross margins and cash generation demonstrate the financial strength of our Company. With respect to the fourth quarter 2009, we project that revenues for the Company will be in the range of $265 to $285 million, with adjusted net income per diluted share in the range of $0.22 to $0.26 and GAAP net income per diluted share, in the range of $0.13 to $0.17."

ARRIS management will conduct a conference call at 5:00 pm EDT, today, Monday, October 26, 2009, to discuss these results in detail. You may participate in this conference call by dialing 888-679-8033 or 617-213-4846 for international calls prior to the start of the call and providing the ARRIS Group, Inc. name, conference passcode 82209148 and Jim Bauer as the moderator. Please note that ARRIS will not accept any calls related to this earnings release until after the conclusion of the 5:00pm EDT conference call. A replay of the conference call can be accessed approximately two hours after the call through Friday, October 30, 2009 by dialing 888-286-8010 or 617-801-6888 for international calls and using the passcode 23090362. A replay also will be made available for a period of 12 months following the conference call on ARRIS' website at www.arrisi.com.

About ARRIS

ARRIS is a global communications technology company specializing in the design, engineering and supply of technology supporting triple- and quad-play broadband services for residential and business customers around the world. The company supplies broadband operators with the tools and platforms they need to deliver carrier-grade telephony, demand driven video, next-generation advertising, network and workforce management solutions, access and transport architectures and ultra high-speed data services. Headquartered in Suwanee, Georgia, USA, ARRIS has R&D centers in Suwanee; Beaverton, OR; Chicago, IL; Kirkland, WA; State College, PA; Wallingford, CT; Waltham, MA; Cork, Ireland; and Shenzhen, China, and operates support and sales offices throughout the world. Information about ARRIS products and services can be found at www.arrisi.com.

Forward-looking statements:

Statements made in this press release, including those related to:

    --  growth expectations and business prospects;
    --  fourth quarter and 2009 revenues and net income;
    --  expected sales levels and acceptance of new ARRIS products;

    --  the general market outlook and industry trends

are forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Among other things,

    --  projected results for the fourth quarter as well as the general outlook
        for 2009 and beyond are based on preliminary estimates, assumptions and
        projections that management believes to be reasonable at this time, but
        are beyond management's control;
    --  our customers operate in a capital intensive consumer based industry,
        and the current disruptions in the capital markets or changes in
        customer spending may adversely impact their ability or willingness  to
        purchase the products that we offer; and

    --  because the market in which ARRIS operates is volatile, actions taken
        and contemplated may not achieve the desired impact relative to changing
        market conditions and the success of these strategies will be dependent
        on the effective implementation of those plans while minimizing
        organizational disruption.

In addition to the factors set forth elsewhere in this release, other factors that could cause results to differ from current expectations include: the uncertain current economic climate and its impact on our customers' plans and access to capital; the impact of rapidly changing technologies; the impact of competition on product development and pricing; the ability of ARRIS to react to changes in general industry and market conditions including regulatory developments; rights to intellectual property, market trends and the adoption of industry standards; and consolidations within the telecommunications industry of both the customer and supplier base. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the Company's business. Additional information regarding these and other factors can be found in ARRIS' reports filed with the Securities and Exchange Commission, including its Form 10-Q for the quarter ended June 30, 2009. In providing forward-looking statements, the Company expressly disclaims any obligation to update publicly or otherwise these statements, whether as a result of new information, future events or otherwise.


                                    ARRIS GROUP, INC.
                         PRELIMINARY CONSOLIDATED BALANCE SHEETS
                                     (in thousands)
                                      (unaudited)

                  September 30, June 30,  March 31, December 31, September 30,
                      2009       2009       2009       2008         2008
    ASSETS

    Current
     assets:
      Cash and
       cash
       equivalents  $461,795    $476,846   $398,938   $409,894     $305,987
      Short-term
       investments,
       at fair
       value          99,917      47,195     25,494     17,371       23,571
                      ------      ------     ------     ------       ------
                     561,712     524,041    424,432    427,265      329,558

      Restricted
       cash            4,473       4,552      4,550       5,673       5,768
      Accounts
       receivable,
       net           119,125     128,482    155,792     159,443     180,367
      Other
       receivables     2,235       5,904      6,636       4,749       5,180
      Inventories,
       net           100,024     115,944    120,774     129,752     139,598
      Prepaids        10,764       7,700      6,994       8,004       5,156
      Income taxes
       recoverable     4,212         366      3,232         362       1,896
      Current
       deferred
       income tax
       assets         32,883      41,166     49,027      44,004      42,714
      Other current
       assets         12,981      11,995     15,083      19,420      20,236
                      ------      ------     ------      ------      ------
        Total
         current
         assets      848,409     840,150    786,520     798,672     730,473

    Property,
     plant and
     equipment,
     net              58,339      60,048     59,438      59,204      60,268
    Goodwill         234,416     231,684    231,684     231,684     449,418
    Intangible
     assets, net     201,351     208,822    218,085     227,348     236,689
    Investments       30,574      10,317     14,593      14,681      15,086
    Noncurrent
     deferred
     income
     tax assets        3,593       3,870      3,771      12,157       3,988
    Other assets       7,648       6,251      5,483       6,576       7,173
                       -----       -----      -----       -----       -----
                  $1,384,330  $1,361,142 $1,319,574  $1,350,322  $1,503,095
                  ==========  ========== ==========  ==========  ==========


    LIABILITIES AND
     STOCKHOLDERS'
     EQUITY

    Current
     liabilities:
      Accounts
       payable       $42,659     $48,859    $44,422     $75,863     $54,304
      Accrued
       compensation,
       benefits
       and related
       taxes          27,054      20,753     15,583      27,024      21,831
      Accrued
       warranty        5,292       5,185      5,306       5,652       6,354
      Deferred
       revenue        35,423      43,727     44,006      44,461      35,986
      Current
       portion of
       long-term
       debt              148         148        147         146         234
      Current
       deferred
       income tax
       liability         250         248        241       1,059           -
      Other
       accrued
       liabilities    34,979      35,852     31,922      25,410      30,205
                      ------      ------     ------      ------      ------
        Total
         current
         liabilities 145,805     154,772    141,627     179,615     148,914
    Long-term
     debt, net
     of current
     portion         208,433     205,710    203,080     211,870     209,340
    Accrued
     pension          18,914      19,665     19,289      18,820      10,622
    Noncurrent
     income tax
     payable          10,632      12,386     12,441       9,607      10,128
    Noncurrent
     deferred
     income tax
     liability        35,188      33,999     42,530      41,598      67,403
    Other
     noncurrent
     liabilities      15,301      15,094     14,391      15,343      18,088
                      ------      ------     ------      ------      ------
          Total
           liabili-
            ties     434,273     441,626    433,358     476,853     464,495

    Stockholders'
     equity:
      Preferred
       stock               -           -          -           -           -
      Common
       stock           1,385       1,379      1,368       1,362       1,360
      Capital in
       excess of
       par value   1,177,958   1,169,223  1,159,054   1,159,097   1,155,211
      Treasury
       stock at
       cost          (75,960)    (75,960)   (75,960)    (75,960)    (75,960)
      Unrealized
       loss on
       marketable
       securities        (60)       (161)      (372)       (274)       (128)
      Unfunded
       pension
       liability      (8,070)     (8,070)    (8,070)     (8,070)     (3,358)
      Accumulated
       deficit      (145,012)   (166,711)  (189,620)   (202,502)    (38,341)
      Cumulative
       translation
       adjustments      (184)       (184)      (184)       (184)       (184)
                        ----        ----       ----        ----        ----
        Total
         stockholders'
         equity      950,057     919,516    886,216     873,469   1,038,600
                     -------     -------    -------     -------   ---------
                  $1,384,330  $1,361,142 $1,319,574  $1,350,322  $1,503,095
                  ==========  ========== ==========  ==========  ==========



                                ARRIS GROUP, INC.
                PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)


                                 For the Three Months  For the Nine Months
                                  Ended September 30,  Ended September 30,
                                  ------------------   ------------------
                                   2009        2008       2009       2008
                               (unaudited) (unaudited) (unaudited) (unaudited)
                                ---------   ---------   ---------   ---------

    Net sales                       $275,772  $297,551  $807,811  $852,167
    Cost of sales                    160,299   191,417   479,548   567,901
                                     -------   -------   -------   -------
      Gross margin                   115,473   106,134   328,263   284,266
      Gross margin %                    41.9%     35.7%     40.6%     33.4%
    Operating expenses:
      Selling, general, and
       administrative expenses        36,311    33,012   110,782   107,040
      Research and development
       expenses                       30,909    27,473    89,447    83,257
      Restructuring charges               73       202       785       782
      Amortization of intangible
       assets                          9,281     9,146    27,807    34,854
                                       -----     -----    ------    ------
                                      76,574    69,833   228,821   225,933
                                      ------    ------   -------   -------
    Operating income                  38,899    36,301    99,442    58,333
    Other expense (income):
      Interest expense                 4,356     4,360    13,121    12,672
      Loss (gain) on investments        (238)       37      (453)      210
      Loss (gain) on foreign
       currency                        1,114       382     3,642      (258)
      Interest income                   (424)   (1,504)   (1,172)   (5,891)
      Gain on debt retirement              -         -    (4,152)        -
      Other income, net                 (263)      (72)     (887)      (43)
                                        ----       ---      ----       ---
    Income from continuing
     operations before income taxes   34,354    33,098    89,343    51,643
      Income tax expense              12,655    10,664    31,853    17,551
                                      ------    ------    ------    ------
        Net income                   $21,699   $22,434   $57,490   $34,092
                                     =======   =======   =======   =======

    Net income per common share:
      Basic                            $0.17     $0.18     $0.46     $0.27
                                       =====     =====     =====     =====
      Diluted                          $0.17     $0.18     $0.45     $0.27
                                       =====     =====     =====     =====

    Weighted average common shares:
      Basic                          125,326   122,922   124,381   125,466
                                     =======   =======   =======   =======
      Diluted                        129,695   125,420   127,916   127,249
                                     =======   =======   =======   =======



                                 ARRIS GROUP, INC.
                 PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (in thousands)

                               For the Three Months       For the Nine Months
                                Ended September 30,       Ended September 30,
                                ------------------        ------------------
                                 2009         2008         2009        2008
                             (unaudited)  (unaudited)  (unaudited) (unaudited)
                              ---------    ---------    ---------   ---------

    Operating
     Activities:
      Net income               $21,699      $22,434      $57,490      $34,092
        Depreciation             5,408        5,426       15,370       15,521
        Amortization
         of intangible
         assets                  9,281        9,146       27,807       34,854
        Stock
         compensation
         expense                 4,260        2,895       11,714        8,286
        Deferred income
         tax provision           9,751        3,856       13,678        2,863
        Amortization of
         deferred
         finance fees              180          190          548          571
        Provision for
         doubtful
         accounts                   11          151            1          365
        Loss (gain) on
         investments              (238)          37         (453)         210
        Gain on
         disposal of
         fixed assets              (76)         (13)         (46)         (15)
        Non-cash
         interest expense        2,772        2,710        8,308        7,972
        Gain on debt
         retirement                  -            -       (4,152)           -
        Excess tax
         benefits from
         stock-based
         compensation
         plans                  (1,471)         (24)      (2,027)         (24)
      Changes in operating
       assets &
       liabilities,
       net of effects of
       acquisitions and
       disposals:
        Accounts
         receivable              9,830       (1,819)      40,801      (12,103)
        Other
         receivables             2,359          736          539       (4,001)
        Inventory               16,641        5,182       30,449       (6,028)
        Income taxes
         payable/
         recoverable            (4,800)       4,972       (2,868)        (657)
        Accounts payable
         and accrued
         liabilities            (9,757)     (10,567)     (32,620)       9,743
        Other, net              (2,800)         285        6,665       (5,117)
                                ------          ---        -----       ------
          Net cash
           provided by
           operating
           activities           63,050       45,597      171,204       86,532

    Investing
     Activities:
      Purchases of
       property,
       plant, and
       equipment                (3,459)      (4,652)     (14,327)     (16,444)
      Cash paid for
       acquisition, net of
       cash
       acquired                 (7,930)      (5,647)      (8,130)     (10,066)
      Cash proceeds from
       sale of property,
       plant & equipment           207           13          208          250
      Purchases of
       investments             (93,079)     (70,111)    (151,845)     (86,998)
      Disposals of
       investments              20,479       50,006       54,416      122,486
                                ------       ------       ------      -------
          Net cash
           provided by
           (used in)
           investing
           activities          (83,782)     (30,391)    (119,678)       9,228

    Financing
     Activities:
      Payment of debt and
       capital lease
       obligations                 (49)        (322)     (10,677)     (35,518)
      Repurchase of common
       stock                         -            -            -      (75,960)
      Excess tax benefits
       from stock-based
       compensation plans        1,471           24        2,027           24
      Repurchase of
       shares to
       satisfy minimum tax
       withholdings                  -            -       (2,180)      (1,035)
      Fees and proceeds
       from
       issuance of common
       stock, net                4,259          813       11,205       (1,081)
                                 -----          ---       ------       ------
          Net cash
           provided by
           (used in)
           financing
           activities            5,681          515          375     (113,570)

          Net increase
           (decrease)
           in cash and
           cash
           equivalents         (15,051)      15,721       51,901      (17,810)
    Cash and cash
     equivalents
     at beginning
     of period                 476,846      290,266      409,894      323,797
                               -------      -------      -------      -------
    Cash and cash
     equivalents
     at end of
     period                   $461,795     $305,987     $461,795     $305,987
                              ========     ========     ========     ========



                                ARRIS GROUP, INC.
                PRELIMINARY SUPPLEMENTAL NET INCOME RECONCILIATION
                      (in thousands, except per share data)
                                   (unaudited)


                                        Q1 2009               Q2 2009
                                        -------               -------
                                           Per Diluted           Per Diluted
                                   Amount     Share      Amount     Share
                                   ------     -----      ------     -----
      Net income (loss)           $12,882     $0.10     $22,909      $0.18

      Highlighted items:
        Impacting gross
         margin:
          Stock compensation
           expense                    303         -         366          -

        Impacting operating
         expenses:
          Acquisition costs,
           restructuring, and
           other                      120         -         592          -
          Amortization of
           intangible assets        9,263      0.07       9,263       0.07
          Stock compensation
           expense                  3,098      0.02       3,687       0.03

        Impacting other
         (income) / expense:
          Non-cash interest
           expense                  2,818      0.02       2,718       0.02
          Gain on repurchase of
           debt                    (4,152)    (0.03)          -          -

        Impacting income tax
         expense:

          Adjustments of income
           tax valuation
           allowances and
           research &
           development credits
           and other                1,455      0.01           -          -
        Tax related to
         highlighted items
         above                     (3,646)    (0.03)     (5,322)     (0.04)
                                    -----      ----      ------       ----
      Total highlighted
       items                        9,259      0.07      11,304       0.09
                                    -----      ----      ------       ----
      Net income excluding
       highlighted items          $22,141     $0.18     $34,213      $0.27
                                  =======     =====     =======      =====

      Weighted average
       common shares -
       diluted                              124,920                128,054
                                            =======                =======


                                        Q1 2008               Q2 2008
                                        -------               -------
                                           Per Diluted           Per Diluted
                                   Amount     Share      Amount     Share
                                   ------     -----      ------     -----
      Net income (loss)            $3,829     $0.03      $7,829      $0.06

      Highlighted items:
        Impacting gross
         margin:
          Stock compensation
           expense                    201         -         245          -

        Impacting operating
         expenses:
          Integration costs           427         -           -          -
          Restructuring charges       405         -         175          -
          Amortization of
           intangible assets       13,254      0.10      12,454       0.10
          Stock compensation
           expense                  2,350      0.02       2,595       0.02

        Impacting other
         (income) / expense:
          Non-cash interest
           expense                  2,605      0.02       2,657       0.02

        Impacting income tax
         expense:
          Adjustments of tax
           related to goodwill
           impairment and
           certain provision to
           return adjustments           -         -           -          -

        Tax related to
         highlighted items
         above                     (7,268)    (0.06)     (6,726)     (0.05)
                                   ------      ----      ------       ----
      Total highlighted
       items                       11,974      0.09      11,400       0.09
                                   ------      ----      ------       ----
      Net income excluding
       highlighted items          $15,803     $0.12     $19,229      $0.15
                                  =======     =====     =======      =====

      Weighted average
       common shares -
       diluted                              131,981                124,651
                                            =======                =======


                                         Q3 2009            Sept YTD 2009
                                         -------            -------------
                                           Per Diluted           Per Diluted
                                   Amount     Share      Amount     Share
                                   ------     -----      ------     -----
      Net income (loss)           $21,699     $0.17     $57,490       0.45

      Highlighted items:
        Impacting gross
         margin:
          Stock compensation
           expense                    394         -       1,063       0.01

        Impacting operating
         expenses:
          Acquisition costs,
           restructuring, and
           other                      348         -       1,060       0.01
          Amortization of
           intangible assets        9,281      0.07      27,807       0.22
          Stock compensation
           expense                  3,866      0.03      10,651       0.08

        Impacting other
         (income) / expense:
          Non-cash interest
           expense                  2,772      0.02       8,308       0.06
          Gain on repurchase of
           debt                         -         -      (4,152)     (0.03)

        Impacting income tax
         expense:

          Adjustments of income
           tax valuation
           allowances and
           research &
           development credits
           and other                 (166)        -       1,289       0.01
        Tax related to
         highlighted items
         above                     (6,218)    (0.05)    (15,186)     (0.12)
                                   ------      ----      ------       ----
      Total highlighted
       items                       10,277      0.08      30,840       0.24
                                   ------      ----      ------       ----
      Net income excluding
       highlighted items          $31,976     $0.25     $88,330      $0.69
                                  =======     =====     =======      =====

      Weighted average
       common shares -
       diluted                              129,695                127,916
                                            =======                =======


                                         Q3 2008            Sept YTD 2008
                                         -------            -------------
                                           Per Diluted           Per Diluted
                                   Amount     Share      Amount     Share
                                   ------     -----      ------     -----
      Net income (loss)           $22,434     $0.18     $34,092      $0.27

      Highlighted items:
        Impacting gross
         margin:
          Stock compensation
           expense                    264         -         710       0.01

        Impacting operating
         expenses:
          Integration costs             -         -         427          -
          Restructuring charges       202         -         782       0.01
          Amortization of
           intangible assets        9,146      0.07      34,854       0.27
          Stock compensation
           expense                  2,631      0.02       7,576       0.06

        Impacting other
         (income) / expense:
          Non-cash interest
           expense                  2,710      0.02       7,972       0.06

        Impacting income tax
         expense:
          Adjustments of tax
           related to goodwill
           impairment and
           certain provision to
           return adjustments      (1,530)    (0.01)     (1,530)     (0.01)

        Tax related to
         highlighted items
         above                     (5,164)    (0.04)    (19,158)     (0.15)
                                    -----      ----      ------       ----
      Total highlighted
       items                        8,259      0.07      31,633       0.25
                                    -----      ----      ------       ----
      Net income excluding
       highlighted items          $30,693     $0.24     $65,725      $0.52
                                  =======     =====     =======      =====

      Weighted average
       common shares -
       diluted                              125,420                127,249
                                            =======                =======


    With respect to stock compensation expense,  ARRIS records non-cash
    compensation expense related to grants of options and restricted stock.
    Depending upon the size, timing and the terms of the grants, this non-cash
    compensation expense may vary significantly.  With respect to amortization
    of intangibles, the intangibles being amortized relate to our recent
    acquisition of C-COR.  The acquisition costs, restructuring, and other
    reflect items that, although they or similar items might recur, are of a
    nature and magnitude that identifying them separately provides investors
    with a greater ability to project ARRIS' future performance.  With
    respect to the convertible debt non-cash interest, ARRIS records non-cash
    interest expense related to the 2013 convertible debt as a result of the
    adoption of FSP ABP 14-1 on January 1, 2009.  Disclosing the non-cash
    piece provides investors with the information regarding interest that
    will not be paid out in cash.  During the first quarter of 2009,
    ARRIS repurchased a portion of their convertible debt and recognized a
    gain of approximately $4.2 million.   In the first and third quarter of
    2009, a tax expense of approximately $1.3 million was recorded for
    state  valuation allowances, research and development tax credits and
    provision to return differences resulting from filing of the 2008 tax
    return.  During the first quarter of 2008, ARRIS recorded incremental
    costs of $0.4 million as a result of the C-COR integration.  In the
    third quarter of 2008, ARRIS recorded a net tax benefit of $1.6 million
    related to provision to return differences resulting from the filing of
    the 2007 tax return.

    In assessing operating performance and preparing budgets and forecasts,
    ARRIS' management considers performance after making these adjustments
    and believes that providing investors with the same information provides
    greater transparency and insight into management's analysis.



                            ARRIS GROUP, INC.
                  Net Income Reconciliation (unaudited)
                           Q4 EPS 2009 Guidance


    Estimated GAAP EPS - diluted                        $0.13 - $0.17
    Reconciling Items:
        Amortization of intangibles, after tax*                  0.05
        Stock compensation expense, after tax                    0.02
      Non-cash interest expense, after tax                       0.01
      Acquisition, restructuring and other, after
       tax                                                       0.01
                                                                 ----
          Subtotal                                               0.09
                                                                 ----
    Estimated adjusted (non-GAAP) EPS - diluted         $0.22 - $0.26
                                                   ==================

    *  Does not include the amortization for the Digeo intangibles as the
       valuation has not been completed.

    See the Supplemental Net Income Reconciliation for a discussion regarding
    management's reasoning for providing this adjusted financial measure

SOURCE ARRIS Group, Inc.

Jim Bauer, Investor Relations, +1-678-473-2647, jim.bauer@arrisi.com